One-person advisers devalue business: AdviceFirst
One-man band adviser operations won’t be able to survive as the effects of increased regulation role out, says AdviceFirst chairman Peter Chote.
Monday, September 2nd 2013, 6:00AM 
11 Comments
by Susan Edmunds
AdviceFirst has recently acquired four financial advisory businesses. The firm is majority-owned by AMP and is part of its Quality Advice Network.
It offers advice on insurance, loans, investment and superannuation, with 39 advisers across the country. Chote said AdviceFirst was always in discussions with other businesses about the potential for further acquistions. It wants to target parts of the country where it does not already have representation.
AdviceFirst’s latest acquisitions are of John Grogan Insurances Ltd, Advice 4 U, Bob Edwards Insurance and Investments Ltd and Colin Strang Financial Services.
Executive chairman Peter Chote said clients of those businesses would receive a highly-personalised service and benefit from the scale and security provided by AdviceFirst.
“AdviceFirst has a commitment to providing the highest quality advice and as a result of these acquisitions, we’re excited to welcome a significant number of new clients and demonstrate our unique value proposition to them. We’re particularly pleased to be opening a new office in Dunedin as we continue to grow our presence nationwide.”
He said being part of the network meant advisers had a range of support services available to them.
Advisers from Advice 4 U and Colin Strang Financial Services are joining AdviceFirst. Advisers at the other businesses are not.
Chote said in some cases, advisers approached the organisation and in others, AdviceFirst drove the process.
“Advisers are fiercely entrepreneurial and individualist and our view is that there will always be a place for people like that but our value proposition is to build sustainable advice businesses that give those advisers real equity in a real business that is less dependent one person.”
He said he did not know how advisers operating on their own would be able to manage regulation unless they came together with other advisers and had their processes reviewed.
A lot of one-person operations eroded all their value before they came to sell, he said. Advisers who got to retirement age generally had a client base the same age, and there was not a lot of future renewal income to purchase. “If you hang on too long, you actually devalue your business.”
AdviceFirst is not yet a QFE, Chote said.
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Comments from our readers
What a self-serving statement.
AMP and AdviceFirst can scaremonger all they like but they are wasting their breath on the majority of independent advisers who have their heads screwed on right. No sale!
All my clients are retired and they keep me busy.better to stay a one man band than make a dumb decision I reckon.
The more one man bands that are swallowed up by this crowd so much the better. Provides even more opportunity for those that do actually put the client first.
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